Sponsors (6)
Official title: Amend the Internal Revenue Code of 1986 to improve the low-income housing credit.
Introduced August 6, 2026 by Amy Klobuchar · Last progress August 6, 2026
The bill substantially expands targeted, accessible affordable housing for people with disabilities and older adults and makes LIHTC rules more predictable, but does so at greater federal cost, with implementation and administrative burdens, potential trade-offs for other low-income renters and smaller projects, and geographic limits that may leave some needs unmet.
Low-income renters, people with disabilities, and older adults would gain materially more affordable, disability-accessible rental units and stronger protections / targeting to help them remain in community homes.
People living in environmentally burdened or disadvantaged (EPA-designated) neighborhoods would be prioritized for accessible affordable housing through targeted LIHTC incentives.
State housing agencies, program administrators, and the Treasury/IRS gain clearer, more predictable rules — including an explicit inflation-indexed statutory formula, technical assistance, and measurable allocation targets (e.g., 40% disability-target over rolling 3 years) — improving program planning and consistency.
Taxpayers could face significantly higher federal costs or reduced federal revenue over time because LIHTC amounts are increased and inflation-indexed, creating potential pressure on deficits or other spending priorities.
Developers and projects may face higher upfront construction or retrofit costs from accessibility requirements and changed thresholds, which can raise overall project budgets, push up rents in some markets, and make smaller projects less viable or ineligible.
State and local housing agencies will face added administrative, certification, and compliance burdens (matching requirements, necessity certifications, 3‑year rolling tracking and double-counting rules), increasing implementation complexity and workload.
Based on analysis of 6 sections of legislative text.
Increases LIHTC allocation amounts, creates a bonus credit for projects with 50%+ units meeting adaptable accessibility standards, and requires state plans to target 40% of LIHTC units to serve households with people with disabilities over any 3‑year period.
Creates stronger tax incentives and state planning requirements to expand affordable, disability‑accessible housing. It raises formula amounts used to allocate low‑income housing tax credits, creates a bonus credit for buildings where at least half of the low‑income units are built to adaptable accessibility standards in eligible areas, and requires state qualified allocation plans to target at least 40% of awarded low‑income units over any three‑year period to projects serving households that include people with disabilities. The bill phases in higher per‑capita and minimum credit amounts starting for calendar years after 2025, defines indexing for future increases, and makes the new bonus credit and allocation plan targets effective for allocations and bond transactions after December 31, 2026. It also emphasizes technical assistance, integration, and community participation for older adults and people with disabilities.